Is PWM worth it after undergrad?

pwm244's picture
Rank: Chimp | 10

I'm graduating this year and have been considering going into PWM as an investment advisor full-time. I have done a couple summers at a bb and have a good idea of what is involved. I pretty much have no other offers.

I am aware that 90%+ of new brokers fail, that being said, is there any potential in doing it or should I look for other alternatives? I'm a non target with a 3.1.

Comments (39)

Apr 13, 2011

ekudekud
Silver Bananas awarded to this user: 1
Monkey Shit thrown at this user: 116

Thanks

Apr 14, 2011
ekudekud:
pwm244:

ekudekud
Silver Bananas awarded to this user: 1
Monkey Shit thrown at this user: 116

Thanks

In my defense, that silver banana was from someone with a twisted sense of humor.

You are allowed to appeal any banna point changes.

Apr 13, 2011
pwm244:

ekudekud
Silver Bananas awarded to this user: 1
Monkey Shit thrown at this user: 116

Thanks

I'm guessing he'll be at the top of the soiled monkeys list by the end of the month if he sticks with it

Making money is art and working is art and good business is the best art - Andy Warhol

Apr 13, 2011

Of course PWM > Unemployed. Heck there are some PWM guys who make tons. I don't think you could get a comparably good job this late in the academic year.

Do the opposite of whatever ekudekud says, he's an idiot who is wasting his life.

Apr 13, 2011
absinthe:

PWM > Unemployed.

I would add ops > unemployed. Other than that Barnaby makes some good points

Apr 13, 2011

It depends how good your sales and people skills are. If you can sell go for it, a lot of PWM guys where I live do better than most I-banking and S&T guys. If you are more introverted and interested in the analytical side of finance, your better off waiting it out to get a non sales role. However, if its between that and ops, chose PWM. Ops a ticket to nowhere.

Apr 13, 2011

I was considering ops recently, it pays around 50-60k (with not much progression at all) from what ive heard and is 9-5 hours. Whats the average salary for a new broker at a BB and what growth potential does that have?

How analytical is ops, and why does it even pay 50-60k? From the way its discussed here, I'd think that it would be menial enough to only command a 30-40k salary...

Apr 13, 2011

Your opinion of Ops is jaded by the blow hards that shit on it here. Is it glamorous? No. But its a fucking job and it pays really well compared to anything other than other finance jobs coming out of UG. The hours are predictable and not nearly as taxing as banking but it definitely has the downside of being a bit of a hard sell to get out of.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Apr 13, 2011
happypantsmcgee:

Your opinion of Ops is jaded by the blow hards that shit on it here. Is it glamorous? No. But its a fucking job and it pays really well compared to anything other than other finance jobs coming out of UG. The hours are predictable and not nearly as taxing as banking but it definitely has the downside of being a bit of a hard sell to get out of.

Yeah, thats pretty much what I see ops as (without the biases here). For guys who didn't make banking, S&T, or anything "analytical", my only other options would be accounting, or other bullshit 30-50k jobs. Ops is noticeably better than the other options I would have. What kind of GPA does OPS usually require and is it possible to break in with a ~3.2?

Apr 13, 2011

PWM out of undergrad is tough. You can either go work in PWM at one of the BBs and do mostly monotonous work as an analyst (prospecting, recording call notes, updating quarterly portfolio reports for clients) or you can dive in head first and go work for a place like UBS or MS Smith Barney, where they have more of a brokerage model and you can start building your own book. Its going to be tough to build a book as 22 year old kid (hell, I wouldn't give my money to a 22 year old, regardless of his GPA and where he went to school). Going to work at a BB is tough because you're pushed to get a CFA, and you're basically reevaluated for an associate position at the end of 2 or 3 years. A lot of times people get cut and aren't offered an associate position at the end of 3 years. At that point they have few transferable skills for other areas in finance.

I'd only do PWM if I had a solid network and build a decent sized book (which is much more feasible when you're 40 years old and know enough people with money).

Apr 13, 2011
Dr Barnaby Fulton:

PWM out of undergrad is tough. You can either go work in PWM at one of the BBs and do mostly monotonous work as an analyst (prospecting, recording call notes, updating quarterly portfolio reports for clients) or you can dive in head first and go work for a place like UBS or MS Smith Barney, where they have more of a brokerage model and you can start building your own book. Its going to be tough to build a book as 22 year old kid (hell, I wouldn't give my money to a 22 year old, regardless of his GPA and where he went to school). Going to work at a BB is tough because you're pushed to get a CFA, and you're basically reevaluated for an associate position at the end of 2 or 3 years. A lot of times people get cut and aren't offered an associate position at the end of 3 years. At that point they have few transferable skills for other areas in finance.

I'd only do PWM if I had a solid network and build a decent sized book (which is much more feasible when you're 40 years old and know enough people with money).

Well said.

Apr 13, 2011
Dr Barnaby Fulton:

PWM out of undergrad is tough. You can either go work in PWM at one of the BBs and do mostly monotonous work as an analyst (prospecting, recording call notes, updating quarterly portfolio reports for clients) or you can dive in head first and go work for a place like UBS or MS Smith Barney, where they have more of a brokerage model and you can start building your own book. Its going to be tough to build a book as 22 year old kid (hell, I wouldn't give my money to a 22 year old, regardless of his GPA and where he went to school). Going to work at a BB is tough because you're pushed to get a CFA, and you're basically reevaluated for an associate position at the end of 2 or 3 years. A lot of times people get cut and aren't offered an associate position at the end of 3 years. At that point they have few transferable skills for other areas in finance.

I'd only do PWM if I had a solid network and build a decent sized book (which is much more feasible when you're 40 years old and know enough people with money).

Most accurate out of everything said here sb for you

Apr 15, 2011
Dr Barnaby Fulton:

). Going to work at a BB is tough because you're pushed to get a CFA, and you're basically reevaluated for an associate position at the end of 2 or 3 years. A lot of times people get cut and aren't offered an associate position at the end of 3 years. At that point they have few transferable skills for other areas in finance.

I'd only do PWM if I had a solid network and build a decent sized book (which is much more feasible when you're 40 years old and know enough people with money).

Isn't it a good thing to get a CFA. After getting the CFA, is it possible to join a fund, or start your own fund?

Apr 18, 2011
Walkerr:
Dr Barnaby Fulton:

). Going to work at a BB is tough because you're pushed to get a CFA, and you're basically reevaluated for an associate position at the end of 2 or 3 years. A lot of times people get cut and aren't offered an associate position at the end of 3 years. At that point they have few transferable skills for other areas in finance.

I'd only do PWM if I had a solid network and build a decent sized book (which is much more feasible when you're 40 years old and know enough people with money).

Isn't it a good thing to get a CFA. After getting the CFA, is it possible to join a fund, or start your own fund?

Getting a CFA is definitely a good thing, but it's a huge pain in the ass and it's only really helpful for asset management. It may be helpful for some jobs in IB or S&T, but probably not enough so to payoff. If you're 100% positive you're staying in AM or PWM as a PWM analyst at one of those BBs, then by all means, try to go get one. However if you don't get asked to come back as an associate after a 3 yr analyst and you decide AM or PWM is not for you, it's kind of a waste of time/money/effort.

Apr 13, 2011

Dude, I know guys that got into Ops with 2.5 GPAs.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Apr 13, 2011

If it's a BB PWM analyst program, I would go for it.

Path: Analyst --> Associate or MBA --> ??

If you start as a broker, the challenge will be building your AUM. Not too many older clients are eager to let a 23 year old manage their money.

Apr 13, 2011

I don't about the whole age really being that big of a deal. Is it easier to build up your book at 40? Sure but at 23 you also have a hell of a lot less riding on your paycheck. I know 2 brokers (one east coast, one midwest) that started right out of UG and they're doing fine. They built up their books to the point where they are pulling in 60 - 70k and are sort of on cruise control for the time being. Not a bad way to go if you can stomach it.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Apr 13, 2011
happypantsmcgee:

I don't about the whole age really being that big of a deal. Is it easier to build up your book at 40? Sure but at 23 you also have a hell of a lot less riding on your paycheck. I know 2 brokers (one east coast, one midwest) that started right out of UG and they're doing fine. They built up their books to the point where they are pulling in 60 - 70k and are sort of on cruise control for the time being. Not a bad way to go if you can stomach it.

1) Pulling 60-70k for a broker would be on a relatively small book. For instance, at Morgan Stanley advisers can receive payouts in the range of 28%, for those with under $200,000 in annual production, to 47% for brokers who have over $5 million in production. The average Morgan Stanley broker generated $742,000 of revenue. Even at the smallest payout range of 28%, that means the average broker (they have over 18,000) made at least $207,760 in commissions.

2) Operations pays a relatively high starting salary because the positions are completely mind numbing and there is not much room for advancement. If you look at the operations (back office) group at BB, you will find some recent college grads but the majority are "lifers" people that never leave operations. The older ones typically don't even have a college education.

Apr 13, 2011
Chicago85:
happypantsmcgee:

I don't about the whole age really being that big of a deal. Is it easier to build up your book at 40? Sure but at 23 you also have a hell of a lot less riding on your paycheck. I know 2 brokers (one east coast, one midwest) that started right out of UG and they're doing fine. They built up their books to the point where they are pulling in 60 - 70k and are sort of on cruise control for the time being. Not a bad way to go if you can stomach it.

1) Pulling 60-70k for a broker would be on a relatively small book. For instance, at Morgan Stanley advisers can receive payouts in the range of 28%, for those with under $200,000 in annual production, to 47% for brokers who have over $5 million in production. The average Morgan Stanley broker generated $742,000 of revenue. Even at the smallest payout range of 28%, that means the average broker (they have over 18,000) made at least $207,760 in commissions.

That was my point. Both of the guys I was referring to have relatively small books and are enjoying themselves without busting their asses. Just trying to illuminate the fact that there doesn't have to be a huge amount of cold calling and ass busting to make a livable wage.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Apr 13, 2011

I know a lot of you will shit your pants but I know a guy at a BB that got into Ops with a 2.7 from a state school, zero networking and was a direct promote to associate. Dude is doing extremely well for himself.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Apr 13, 2011
happypantsmcgee:

I know a lot of you will shit your pants but I know a guy at a BB that got into Ops with a 2.7 from a state school, zero networking and was a direct promote to associate. Dude is doing extremely well for himself.

are the ranks (analyst, associate, vp, md, head) the same in ops? if so, what would an associate make?

I'm guessing he applied online and got lucky?

Apr 13, 2011

Listen to Barnaby he knows what he's talking about.

Apr 13, 2011

PWM gets a bad rap namely because young people think if you don't succeed, then you really don't have much to show then after.

Of course this is completely false. What you do with your time in PWM is entirely up to you. For instance, I know one guy who started as an advisor out of college & built up his book quite well by the time he was 26/27. He took his CFA while he was an advisor & kept track of a separate investment portfolio in which he did much better than the market 4 years straight.

Now he's about to start his own hedgefund and he said it looks like at least 60 - 75% of his high wealth clients will be seeding him for his fund.

On the other hand, a lot of advisors out of college tend to just build up their book and eagerly wait for their boss's to leave so they can take over their books'.. this is a trap I would not want to fall into, as I couldn't see myself being a Financial Advisor into my late 30s/40s.

Just because you don't gain Wall Street experience doesn't mean you can't become a great portfolio manager by learning the fundamentals.

Apr 13, 2011
rothyman:

PWM gets a bad rap namely because young people think if you don't succeed, then you really don't have much to show then after.

Of course this is completely false. What you do with your time in PWM is entirely up to you.

Exactly. There are many stories like this. I actually know a guy who did PWM/AM at a BB. He put in two years of hard work impressed his higher ups and networked into probably one of the best coverage groups in all of banking. Obviously this is more the exception than the norm but if it was up to me, I would rather work in one of the revenue making groups over ops.

Apr 13, 2011

If you enjoy it then it's worth it

Apr 13, 2011

Is PWM what you want to do or were you actually going for a banking/S&T role? Would this position be an FA at one of the top wirehouses (ML, MS, UBS etc) in their training program? I know that these trainings program pay a decent salary (50k-60k?) while you build up your book of business. Of course the salary won't last forever and you're expected to be able to survive off your own book within 2 years or so. I think ML wants 40mil AUM within 2 years.

I also know people who have transitioned from PWM to S&T. Some moved on to a middle office SA/TA type role and a few became full time traders at BB. I know one also went to a research role and one other to an actual banking job

Apr 13, 2011
Bobb:

Is PWM what you want to do or were you actually going for a banking/S&T role? Would this position be an FA at one of the top wirehouses (ML, MS, UBS etc) in their training program? I know that these trainings program pay a decent salary (50k-60k?) while you build up your book of business. Of course the salary won't last forever and you're expected to be able to survive off your own book within 2 years or so. I think ML wants 40mil AUM within 2 years.

I also know people who have transitioned from PWM to S&T. Some moved on to a middle office SA/TA type role and a few became full time traders at BB. I know one also went to a research role and one other to an actual banking job

Not really, I had a ~4.0 as a freshman but ended up messing things up after sophomore year with my grades and am now considering backup options. I started out wanting to do banking no doubt about it.

Yea thats what the BB pwms want you to bring in, I assume the job gets significantly better when you have established an asset base. I'm probably going to try to go for ops or maybe commercial banking (if my grades aren't considered shit by them) before I try PWM full-time. Any ideas on how to try to network into commercial banking or ops? I lack an internship in both

Apr 13, 2011

I am curious as to what exactly are the duties that go along with the "ops" positions. Are they taking only accounting majors? I am not very knowledgable about this area but am curious to find out more.

Apr 13, 2011

My office and the PWM group next door send staff back and forth, so if you have nothing else it's a good way to network into a company.....

Apr 13, 2011

Despite what people say about ops you will start at 60 to 70, 10 to 15% bonus, sign-on, not too bad for a job right out of college, it wouldn't be my choice, but still not the end of the world. PWM isn't a bad choice though, if you're good you can do very well. A 3.2 and boutique IB experience, I would delay graduation if possible and look at interning at a decent MM or keeping my eyes open for boutique/MM jobs. A 3.2 isn't great, but it's not so horrible no one will ever look at you and the internships are in your favor.

Apr 13, 2011

FT it's a shit show unless you were born into money and can bring in clients (i.e. family friends).

Some firms are pure commission based after your first few years. Very strong sink or swim culture.

Apr 13, 2011
HBS_or_Bust:

FT it's a shit show unless you were born into money and can bring in clients (i.e. family friends).

Some firms are pure commission based after your first few years. Very strong sink or swim culture.

this site should be called 'hearsay oasis'

if you haven't actually experienced it, please don't speak as if you have.

If the glove don't fit, you must acquit!

Apr 13, 2011
WalMartShopper:
HBS_or_Bust:

FT it's a shit show unless you were born into money and can bring in clients (i.e. family friends).

Some firms are pure commission based after your first few years. Very strong sink or swim culture.

this site should be called 'hearsay oasis'

if you haven't actually experienced it, please don't speak as if you have.

Wealthy family / friends DOES make it easier, but there are plenty of guys that knuckle down and crank out $100K+ their first year.

Apr 13, 2011

I do ops/sales/client support for a very big IA group and I love it. Some of the work is very menial but some requires creativity. being an IA requires you to be well rounded and especially working in such a big group I get exposed to so many different clients with different objectives.

The way I see it is the following types of successful IAs exist:

  1. The guys who are the best sellers, regardless of their financial skills (although asset knowledge is the minimum standard) are the ones with corner offices raking the 7 figures.
  2. The braniacs of the firm, the guys who know all the finance/systems/ support staff/trading desks/slang terminology/policies/ and keep a constant watch on the market make good money (100k+) but will never make the big bucks. These IAs usually are partnered with the best sellers (bigger accounts)
  3. Then there's the middle, the guy who loves his finance but also loves the big bucks, who works 100+ hours a week for the first few years building the book, who dreams of discretionary portfolio management. This is the bulk of the IAs out there.

I want to become an IA like 1. However with the competitiveness of the market these days, I feel I'd have to start at the 2 or 3 (right now i'm hinting to the team I work for I will do 2. for them so they can focus on client facing/building. At the same time I want to shadow them as much as possible).

Just by reading this site it seems that PWM gets a bad rep, but I've decided that this is the best career for me. The competitiveness, the Meritocracy structure, the challenge...all of this appeals more to me than IBD, S&T, and other finance careers.

Apr 14, 2011

I grew up around the wealth management business - family and family friends all with large firms - and did two internships with MS/SB/ML. It is a great business but can be brutal in the beginning while you are building your book. Ask anything you want (from the payout grids, to lifestyle to average comp), I should be able to answer it. I can give you the most information about the WM space (MSSB,UBS, etc.), however, have some comp information about JPM PB from a friend.

fdba Emory Blaine and BBA or otherwise trying to find the perfect pseudonym.

Apr 14, 2011

Faustus do you have to make sure different clients have different trades going or are you allowed to pull all there money together and then make large trades with it?

Apr 14, 2011
blastoise:

Faustus do you have to make sure different clients have different trades going or are you allowed to pull all there money together and then make large trades with it?

I'm curious as well

Apr 14, 2011
Comment

fdba Emory Blaine and BBA or otherwise trying to find the perfect pseudonym.

Apr 15, 2011